Auto industry returns to profitability

The world auto industry has returned to profitability,Scotia Economics said in a report Monday.

Strong sales led the five largest automakers to post combined earnings of $5.5 billion US in the period from January to March, according to auto economist Carlos Gomes.

That was a pronounced turnaround from annual losses averaging more than $22 billion US from 2007 to 2009.

Gomes said the improvement happened in every region, especially in North America where earnings per vehicle jumped to more than $1,500 US, compared with losses since last September.

"The global economy continued to gain momentum through the first quarter of 2010, with growth picking up to roughly four per cent, year over year the fastest pace in two years," said Gomes.

"This acceleration lifted global car sales 25 per cent above a year earlier, to a level only marginally lower than in early 2008. However, volumes still remain nearly five per cent below the industry peak set in mid-2007."